KMU Magazin No. 1/2, January/February 2023 Revised Stock Corporation Law Changes 2023
As of January 1, 2023, there are various innovations for companies as a result of the revised Stock Corporation Act. The changes apply not only to stock corporations, but also to limited liability companies and cooperatives. Some of the changes relevant for SMEs are listed below.
For the sake of linguistic simplicity, the terms for the stock corporation are used (such as "general meeting"), while the terms for the other forms of company are also used (such as "shareholders' meeting" for the limited liability company).
Adaptation of statutes
Important: In order for certain adaptations to be applied, they must have a basis in the Articles of Association, i.e. the Articles of Association must be amended.
Modernization of the General Assembly
General Meetings of Shareholders (GM) can now be held in various ways:
- Written GM: The GM may adopt its resolutions in writing on paper or in electronic form.
- Virtual GM: The GM can be held by electronic means without a meeting place.
- GM with "direct voting": The Board of Directors may provide that shareholders who are not present at the GM may exercise their rights electronically. (Indirect voting by means of an independent proxy is still possible.)
- GM with several venues: The GM can be held at several venues at the same time.
- GM abroad: The GM can also be carried out abroad.
Adjustment of capital requirements
There is more flexible:
- Share capital in a foreign currency: If a foreign currency is essential for the business activity, the share capital can be held in this currency. Permissible currencies are the euro, the British pound, the US dollar and the yen.
- Capital band: The GM may authorize the Board of Directors to increase or decrease the capital as desired within a certain range during a certain period of time.
- Deciding vote of the Chairman at the GM: The Chairman now has the deciding vote by law (as is already the case with the Board of Directors). If the Chairman is not to have a casting vote, this must be stated in the Articles of Association.
- Distribution of interim dividends: Based on interim financial statements, the GM may resolve to distribute an interim dividend.
- Requirements for interim financial statements: The requirements for interim financial statements are uniform.
- Statutory arbitration clauses: The Articles of Incorporation may provide that disputes under corporate law shall be adjudicated by an arbitral tribunal having its seat in Switzerland. The arbitration clause binds the company, the governing bodies and the members of the governing bodies, as well as the shareholders, unless the Articles of Incorporation provide otherwise.
- Strengthening of the shareholder's right to information and inspection: e.g. the business books and files may be inspected by shareholders who together represent at least five percent of the share capital or votes. The BoD must grant inspection within four months of receipt of the request. Shareholders may take notes. Inspection must be granted insofar as it is necessary for the exercise of shareholders' rights and insofar as no business secrets or other interests of the company worthy of protection are jeopardized. Any refusal to allow inspection must be justified in writing. Against a refusal, the shareholders may request the court to order the inspection within 30 days.
Companies that do not comply with the new provisions must adapt their Articles of Association and regulations to the new provisions within two years, i.e. by December 31, 2024. Provisions of the Articles of Incorporation and bylaws that are not compatible with the new law shall remain in force until they have been adapted, but for no longer than two years (until December 31, 2024) (Art. 2 Transitional Provisions).
Side remarks: Proper keeping of directories
Registers of shareholders
Companies must keep registers of their shareholders in which the names and addresses of the owners and beneficiaries are entered. The company must keep the register in such a way that it can be accessed in Switzerland at any time. The entry is made on the basis of documentary evidence of the acquisition of the shareholding or right. These documents must be kept for ten years after removal from the register.
In the case of a joint-stock company, the shareholders' register is the share register of shareholders and beneficiaries (Art. 686 CO); in the case of a limited liability company, it is the share register of shareholders, beneficiaries and additionally pledgees (Art. 790 CO); in the case of a cooperative, it is the cooperative register of cooperative members (Art. 837 CO).
List of beneficial owners
In the case of a stock corporation (Art. 697j CO): Any person who, alone or in concert with third parties, acquires shares in a company whose equity securities are not listed on a stock exchange and thereby reaches or exceeds the threshold of 25 percent of the share capital or votes must, within one month of the acquisition, notify the company as shareholder of the first and last names and address of the natural person on whose behalf he or she is ultimately acting (beneficial owner) - the shareholder thus has a corresponding duty of notification. The beneficial owner may be the shareholder himself or a third party. If the shareholder is a legal entity or partnership, the beneficial owner must be reported as any natural person who controls the shareholder in analogous application of Article 963 paragraph 2 CO.
If there is no such person, the shareholder must report this to the company. If the shareholder is a corporation whose equity securities are listed on a stock exchange, is controlled by such a corporation within the meaning of Article 963 paragraph 2 of the Swiss Code of Obligations, or controls such a corporation in this sense, the shareholder need only report this fact and the name and registered office of the listed corporation. The reporting obligation does not apply if the shares are intermediated securities and deposited with a depositary in Switzerland or entered in the main register; the company shall designate the depositary.
The list of beneficial owners can be kept together with the share register, e.g. as a separate column. The list contains the first and last names and the address of the beneficial owners. The supporting documents on which a report pursuant to Article 697j CO is based must be kept for ten years after the person has been removed from the list. The register must be kept in such a way that it can be accessed in Switzerland at any time.
As long as the shareholder has not fulfilled his reporting obligations, the membership rights associated with the shares whose acquisition must be reported shall be suspended. The shareholder may only assert the property rights associated with such shares once he/she has fulfilled his reporting obligations. If the shareholder fails to comply with his/her reporting obligations within one month of acquiring the shares, the property rights shall be forfeited. If the notification is made at a later date, the shareholder may assert the property rights accruing from that date. The Board of Directors shall ensure that no shareholders exercise their rights in breach of the reporting obligations.
The shareholder must also notify the Company within three months of any change in the first or last name or address of the beneficial owner.
In the case of the limited liability company (Art. 790a CO): The rules on reporting obligations in the case of a shareholding of 25 percent or more also apply to the shareholders of the limited liability company with regard to the ordinary shares, as is the case with the stock corporation, as does the rule on keeping the list of beneficial owners and the consequences of non-compliance with the reporting obligations.
Failure to comply with the reporting obligation and to maintain the registers may result in criminal penalties. A shareholder or limited liability company partner who intentionally fails to comply with the reporting obligations regarding beneficial owners is punishable by a fine of up to 10,000 Swiss francs pursuant to Art. 327 SCC. This penalty is in addition to the civil law consequences already mentioned (suspension of membership rights, forfeiture of property rights). The board of directors and the management of a limited liability company are also subject to the threat of punishment: anyone who willfully fails to keep the share register, the register of shares (limited liability company) or the register of cooperative members, and anyone who fails to keep the register of beneficial owners in the case of a joint stock company or limited liability company, is liable to a fine of up to 10,000 Swiss francs under Art. 327a SCC.
Pursuant to Art. 29 StGB, a special duty incumbent on a legal entity is attributed to a natural person acting as an organ or member of an organ of this legal entity - thus, individual members of the board of directors or members of the limited liability company management are liable to prosecution.
The required directories must be kept properly according to the law; otherwise civil and criminal consequences will follow .